AIR - Air NZ.

[brend]

To me there is no surprise with the current fundamentals disconnect with share price as it all in transition = uncertainty.

Management have always said they put extreme amount of resource into new routes before announcing them. They create demand unlike some airlines that fly a plane somewhere and then create demand.

As far as I know Houston has been a massive success. So much so they are are having to offload freight to deal with the prevailing headwinds back.

[Raz]

Management have always said they put extreme amount of resource into new routes before announcing them. They create demand unlike some airlines that fly a plane somewhere and then create demand.

As far as I know Houston has been a massive success. So much so they are are having to offload freight to deal with the prevailing headwinds back.

Good to hear. I have had two return trips and it was essentially full each flight. It is still just one factor and we don't even have 12 months data on it..

[Beagle]

Investors looking forward know AIR has had a golden period of limited competition on some sectors which is now changing. Share price is just as much about future fundamentals vs current, in addition to market sentiment. It is already partly priced into the share price with uncertainty showing.

Current Fundamentals - sure historical trading has been extraordinary as they have benefit from lack of competition on some key sectors, as an example - AUC to LAX, sector prices rose on average $300-400 across that period after the loss of competition, a licence to print money. They have gained from monopolistic pricing however it can created whiplash when that time comes to an end, as many business case studies show. AIR naturally has diversified from the opportunity into new sectors yet the results are too early. More uncertainty. They may come through it well yet uncertainty on that plays out for now.

A higher than expected dividend is already the expectation..we wait to see on that one.

I was in Wellington last week where all the talk was about the overall multiplier effect of the loss of export income on the wider economy..more uncertainty yet the media is just talking about Dairy in isolation for now, so more to play out yet on that. That is before you take a world view...

To me there is no surprise with the current fundamentals disconnect with share price as it all in transition = uncertainty.

All the broker analysts are fully cognisant of the competition issues you've enunciated and have built them into their valuation's which are currently sitting at a consensus $3.22.
Some brokers such as Craig's analyst haven't upgraded for many months and were expecting lower yields, higher oil and less RPK growth than AIR are achieving so I expect analyst upgrades on the back of a stunning result on Thursday along with a generous fully imputed dividend payable in March. I think you're underestimating AIR's adaptability and management capability and the number of Kiwi's who take a far more parochial approach to who they trust with their travel requirements than you do. Are you going to take a Jetstar night flight into Queenstown ?

[vin]

Just booked 2x flights to Queenstown via Air for a couple of different hunt trips, looking forward to it. Well priced.

Never been to Qtown before!

[Beagle]

Just booked 2x flights to Queenstown via Air for a couple of different hunt trips, looking forward to it. Well priced.

Never been to Qtown before!

Book yourself in for the buffet lunch at the top of the gondola Stratosphere its called, $57 incl the $32 gondola ride. Book well ahead and ask for a table by the window. My wife and I had a fabulous lunch there last month, trust me you'll absolutely love it ! We also flew AIR and had seats 1A and IB on the way back. The staff were very friendly and professional. Fabulous trip...wish it was longer and we were still there...

This will wet your appetite http://www.skyline.co.nz/queenstown/restaurant/

[Raz]

All the broker analysts are fully cognisant of the competition issues you've enunciated and have built them into their valuation's which are currently sitting at a consensus $3.22.
Some brokers such as Craig's analyst haven't upgraded for many months and were expecting lower yields, higher oil and less RPK growth than AIR are achieving so I expect analyst upgrades on the back of a stunning result on Thursday along with a generous fully imputed dividend payable in March. I think you're underestimating AIR's adaptability and management capability and the number of Kiwi's who take a far more parochial approach to who they trust with their travel requirements than you do. Are you going to take a Jetstar night flight into Queenstown ?

haha too funny, possibly i'm underestimating and you are overestimating. The reality is the share price is no where near the consensus forecasts. Its lower than my estimate of fair value, all forecast are based on assumptions as you well know. The sentiment on this thread, which really interest me, has hardly been confident on share price of late...I'm hoping for a short term burst from Thursday..will that be short lived?

AIR certainly in Feb. has been doing price matching which indicates they don't see it quite as you do on consumer market behaviour. Even if they lose no market share they will struggle to maintain their ideal margins if they continue to price match.

ps never fly Jetstar..planes to old, always try to keep that risk return relationship in mind. Still not everyones is alike...look at the number of kiwis flying domestic with them for a mere $20 savings..it all comes down to how you value :-)

[Beagle]

haha too funny, possibly i'm underestimating and you are overestimating. The reality is the share price is no where near the consensus forecasts. Its lower than my estimate of fair value, all forecast are based on assumptions as you well know. The sentiment on this thread, which really interest me, has hardly been confident on share price of late...I'm hoping for a short term burst from Thursday..will that be short lived?

AIR certainly in Feb. has been doing price matching which indicates they don't see it quite as you do on consumer market behaviour. Even if they lose no market share they will struggle to maintain their ideal margins if they continue to price match.

ps never fly Jetstar..planes to old, always try to keep that risk return relationship in mind. Still not everyones is alike...look at the number of kiwis flying domestic with them for a mere $20 savings..it all comes down to how you value :-)

Assumptions that have generally been on the light side when it comes to RPK growth and on the heavy side when it comes to fuel price.
Glad we agree on something.

[skid]

haha too funny, possibly i'm underestimating and you are overestimating. The reality is the share price is no where near the consensus forecasts. Its lower than my estimate of fair value, all forecast are based on assumptions as you well know. The sentiment on this thread, which really interest me, has hardly been confident on share price of late...I'm hoping for a short term burst from Thursday..will that be short lived?

AIR certainly in Feb. has been doing price matching which indicates they don't see it quite as you do on consumer market behaviour. Even if they lose no market share they will struggle to maintain their ideal margins if they continue to price match.

ps never fly Jetstar..planes to old, always try to keep that risk return relationship in mind. Still not everyones is alike...look at the number of kiwis flying domestic with them for a mere $20 savings..it all comes down to how you value :-)

some,like our daughter will take the early flight with Jetstar to save $10(and Mun and Dad have to get up at some ungodly hr to take her to the airport

[dobby41]

some,like our daughter will take the early flight with Jetstar to save $10(and Mun and Dad have to get up at some ungodly hr to take her to the airport

don't do it and it will change her behaviour.

[skid]

don't do it and it will change her behaviour.

we had a bit of a chat about that,you can be sure.